October 2022

Chris Clark conducts interviews with leading corporate directors and subject matter experts for Stuart Levine & Associates, a global consulting and leadership development company. The Planet Governance™ interview series features the views of corporate directors and chief executives on critical issues from ESG and cyber-resiliency to succession planning and board composition.

I recently had the pleasure of chatting with Peter Tomczak, Partner and Chair, North American Litigation & Government Enforcement, Baker McKenzie, to discuss everything from the next generation of corporate directors to ESG to the most positive influence in his incredible career.

Peter P. Tomczak

Chris: Given your experience, what skill sets does the next generation of directors need to bring to their boards?

Peter: The next generation of directors will need to bring those skills that enable boards to fulfill their leadership role in very challenging times.  At present and for the foreseeable future, boards must oversee the business and affairs of their corporations through immense technological changes, geopolitical instability and market volatility.  Many commentators and senior executives have recommended that boards add directors who possess particular experience or industry knowledge and can address specific key risks and trends.  This is sound advice, but as businesses confront a bevy of black swans, other skills will help boards continue to set successful corporate strategies and create long-term value for stockholders. 

The next generation of directors will need to be adept at strategic decision making. In choosing the optimal path forward, directors must recognize their companies’ strengths, weaknesses, and ability to change.  They must also identify opportunities for and threats to profitable expansion and the achievement of corporate missions, and ways to mitigate critical risks. To select the best strategy, directors will need strong analytical skills and an ability to understand and interpret quantitative data.  

The current economic, political and social environments make these always challenging tasks even more difficult. Often, the different strategies available entail complex interactions and tradeoffs, especially when viewed from the perspectives of various corporate stakeholders. Novel strategies may present the greatest risk and reward. As such, creativity and an openness to learning new concepts are important traits for the next wave of corporate directors. They should be able to reassess corporate strategy and readily change course if evolving circumstances demand it.

The next generation of directors must be effective collaborators.  The issues and opportunities being considered at the board level frequently require input from multiple functions.  Further, deliberations and decision making are done collectively as a board, not in isolation as individuals.  Directors thus must be able to effectively communicate valuable ideas in a group setting, while fostering respect for the ideas of others. Certain external parties are more frequently asking directors to communicate directly on issues of importance, such as ESG. To be inspirational leaders, the next generation of directors must be mindful of how strategy, culture and tone are being conveyed to all levels in the organization. 

Boards are no longer perceived as rubberstamps for the plans made by senior management (if effective boards ever were).  Stakeholders seek directors who will actively contribute to setting sound corporate strategy. In doing so, and as was visibly absent in multiple recent corporate scandals, boards must exercise their independent business judgment and appropriately challenge management. The new generation of directors should ask many pertinent and probing questions, especially, “why?”

Overall, directors must bring their integrity and empathy. Government prosecutors and regulators, as well as institutional investors, have increasingly focused on the board’s role in establishing a culture of compliance. And as shown in multiple studies, compassion for others’ views and experiences improves collaboration, morale and the effective communication of corporate strategy. 

Ultimately, the new generation of directors must bring their good character to their boards because those boards’ most important decisions will be about their companies’ values. 

Chris: What might be the best way to properly evaluate boards in terms of being ESG-competent?

Peter: There is generally no one dispositive test by which to evaluate boards’ ESG competency. Boards of companies even in the same industry, acting in an informed manner and in good faith, will reach different conclusions on how to address a particular ESG issue. However, any assessment of a board’s ESG competency should review the quality of the process that the board employs to approach and address ESG. Relevant inquiries include among others: to whom on the board is responsibility allocated for ESG (and select key ESG topics); how often does the board consider significant ESG issues; has the board participated in setting the company’s ESG strategy; how does the board actively monitor the effectiveness of the ESG strategy; and has the board overseen the implementation of real incentives to align senior management’s behavior with that ESG strategy? A board’s ESG competency is also reflected in its honesty and candor in evaluating whether ESG goals are being met.    

Chris: Who was the most positive influence in your career?

Peter: My dad.  He is an incredible intellect, a creative engineer and problem solver, and one of the bravest and hardest working people I know. He embodies good character. His approach to and lessons on leadership drew upon the values he learned as an officer in the U.S. Army, including the importance of the team and leading through service and action. I am blessed to have him as my father.

Chris: Peter, thank you… onward & upward.

Peter P. Tomczak serves as the Chair of Baker McKenzie’s North America Litigation and Government Enforcement Practice Group. Peter serves on the North America Pricing Committee and oversees the practice group’s development and review of non-hourly fee-based arrangements, or AFAs. He joined Baker McKenzie in 2003, after having served as a law clerk for the Delaware Court of Chancery.

Christopher Y. Clark joined Stuart Levine & Associates as a senior consultant after a long career at the National Association of Corporate Directors. He has over 30 years of entrepreneurial and corporate business experience. His expertise ranges across a broad variety of disciplines including corporate governance (with board assessments as a cornerstone), leadership development, strategic communications, and digital content creation.